Among administrative agencies, the National Labor Relations Board (NLRB) is one in which the relationship between public and pri- vate interests takes on a special character. The National Labor Relations Act (NLRA) confers primary jurisdiction upon the Board to decide whether employers or unions have violated the Act by committing unfair labor practices. This jurisdiction covers claims that an employer has uni- laterally instituted changes in hours, wages, or working conditions, in violation of its duty to bargain over such matters with the employees' designated bargaining representative, the union;130 that an employer has
127. See, eg., S. 2038, 99th Cong., 2d Sess. (1986), introduced by Senator McConnell of Kentucky. The bill, if enacted, would further amend Federal Rure of Civil Procedure 16(c) by permitting monetary sanctions to be imposed against attorneys who fail to inform their clients of the availability of alternative dispute resolution techniques. The bill would also amend Rule 68 by permitting costs, including attorney's fees, to be assessed against a party who unreasona- bly refused an opponent's offer to resolve a conflict through an alternative dispute resolution mechanism. The latter aspect of the bill is clearly insensitive to Professor Fiss' concerns in Against Settlement. The former raises serious questions about the propriety of prescribing the content of certain communications between an attorney and a client. See Costly Lawsuits:
Senate Bill Touts Alternative, A.B.A. J., July 1, 1986, at 19.
128. Whether by settlement or, as he referred to it later, any other "contrivance of ADR."
Fiss, Out of Eden, 94 YALE L.J. 1669, 1673 (1985).
129. Fiss, supra note 2, at 1085.
130. Section 8(a)(5) makes it "an unfair labor practice for an employer ... to refuse to
THE HASTINGS LAW JOURNAL
discharged employees because they engaged in statutorily protected union activities;13' that a union has restrained or coerced employees in the exercise of their right to refrain from asserting rights guaranteed in the NLRA;132 that a union caused or attempted to cause an employer to discriminate against an employee;133 or that it has refused to bargain with an employer whose employees it represents.'3 4
Professor Robert Gorman has noted that "Board regulations pro- vide that [an unfair labor practice] charge may be filed by 'any person' and it is usually fied by the aggrieved employee or his union when an employer is the charged party or by the aggrieved employee or employer when a union is the charged party."'135 Charges are investigated by the appropriate regional offices of the Board. If the Board issues a com- plaint, the Board's General Counsel prosecutes the case before an admin- istrative law judge who makes findings and conclusions and files a recommended order. In the vast majority of cases, the NLRB adopts the recommended orders of the administrative law judges. Those orders are not self-executing, however, and the Board must seek enforcement in an appropriate United States Court of Appeals. Either party may seek fur- ther review in the United States Supreme Court.
The NLRA prescribes the NLRB's elaborate role in, and the de- tailed public process for, determining whether an employer or union has committed an unfair labor practice. Often, however, conduct that argua- bly violates the Act is also subject to challenge as a breach of a collective bargaining agreement between an employer and a union. Most agree- ments, for example, contain clauses prohibiting the employer from dis- charging employees except for just cause. An employee or a union might claim that the employer discharged the employee for activity which would not constitute a basis for a dismissal for "just cause." At other times, an employer might claim that its statutory duty to bargain, which
bargain collectively with the representatives of his employees, subject to the provisions of sec- tion 9(a)." 29 U.S.C. § 158(a)(5) (1982). Section 9(a) grants exclusive bargaining rights to the representatives "designated or selected for the purposes of collective bargaining by the major- ity of the employees in a unit appropriate for such purposes." Id. § 159(a).
13 1. Except for its authorization of certain collective-bargaining agreements requiring em- ployees, after a designated time period, to become members of the union that is signatory to the agreement, § 8(a)(3) provides that it is an unfair labor practice for an employer "by dis- crimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization." Id. § 158(a)(3).
132. See id. §§ 157, 158(b)(1)(A).
133. Id. § 158(a)(3), (b)(2).
134. Section 8(b)(3) makes it an unfair labor practice for a union "to refuse to bargain collectively with an employer, provided it is the representative of his employees subject to the provisions of section 9(a)." Id. § 158(b)(3).
135. R. GORMAN, BASIC TExT ON LABOR LAW 7 (1976).
[Vol. 38
ARBITRATION AND THE PUBLIC INTEREST
normally continues during the life of the agreement, was waived by the union in contractual language that requires interpretation. In such cases, although the Board would have the power to interpret the contractual language in dispute,13 6 the question arises whether the Board should do so when the contract contains an arbitration clause. Indeed, because al- most all collective bargaining agreements contain arbitration provisions, the Board has, in a variety of contexts, grappled with this issue.
The NLRB's fluctuating position on this question has tended to re- flect changes in political administrations. Boards dominated by members appointed by conservative presidents have been more likely to defer to arbitration than Boards controlled by appointees of liberal presidents.
The Board's major decisions in this area need to be viewed against that background.
In the 1955 case of Spielberg Manufacturing Co.,137 the Board dis- missed charges on behalf of discharged employees against an employer on the ground that the true reason striking employees had been fired was, according to an already rendered arbitration award, their misconduct during a strike. In explaining its disposition of the case, the Board stated:
[T]he [arbitration] proceedings appear to have been fair and regular, all parties had agreed to be bound, and the decision of the arbitration panel is not clearly repugnant to the purposes and policies of the Act.
In these circumstances we believe that the desirable objective of en- couraging the voluntary settlement of labor disputes will be best served by our recognition of the arbitrators' award.13 8
In Raytheon Co., a 1963 decision, the Board modified the Spielberg standards so as to condition deferral on the arbitrator's having "consid- ered the unfair labor practice issue,"'139 a standard which proved difficult to apply. 140 Eight years later, in Collyer Insulated Wire Co., 141 a refusal- to-bargain case, the Board expanded its deferral policy by declining to hear a case in which arbitration had not yet been held. Although it dis- missed the unfair labor practice complaint, the Board retained jurisdic- tion of the case solely for the purpose of entertaining a motion for further consideration upon a showing that either (a) the dispute was not properly settled or submitted to arbitration, or (b) the grievance or arbitration
136. NLRB v. C & C Plywood Corp., 385 U.S. 421, 428 (1967).
137. 112 N.L.R.B. 1080 (1955).
138. Id. at 1082.
139. 140 N.L.R.B. 883, 885-86 (1963).
140. See Olin Corp., 268 N.L.R.B. 573, 574 (1984) ("[Clonsistent application of the Ray- theon requirement has proven elusive ... .
141. 192 N.L.R.B. 837 (1971).
January 1987]
THE HASTINGS LAW JOURNAL
procedures were unfair or reached a result contrary to the Act.142 The Board's rationale for its deferral policy was based on a variety of factors:
(1) the language of the Labor Management Relations Act (LMRA) which states that "[flinal adjustment by a method agreed upon by the parties is declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing col- lective-bargaining agreement"; 143 (2) the presumed expertise of arbitra- tors in deciding such disputes; and (3) the importance of requiring parties to abide by their contractual commitments to submit such disputes to arbitration.1"4
Not long after it decided Collyer, the Board held that it would defer to prospective arbitration awards not only in refusal-to-bargain cases, but also in any case alleging union or employer unfair labor practices di- rected against individual employees.14 5 Five years later, the Board re- versed itself, limiting prospective deferral to refusal-to-bargain cases, largely on the strength of the swing vote of Chairman Murphy, who ar- gued that "the Board should stay its processes in favor of the parties' grievance arbitration machinery only in those situations where the dis- pute is essentially between the contracting parties and where there is no alleged interference with individual employees' basic rights under Section 7 of the Act."146
In two recent decisions, United Technologies Corp. 147 and Olin Corp., 148 however, the Board once again broadened its deferral practices.
Under United Technologies, the Board now defers to arbitration in cases alleging union or employer unlawful activity directed against individual employees as well as in refusal-to-bargain cases. According to the Board majority in that case:
Where an employer and a union have voluntarily elected to create dis- pute resolution machinery culminating in final and binding arbitration, it is contrary to the basic principles of the Act for the Board to jump into the fray prior to an honest attempt by the parties to resolve their disputes through that machinery.149
At the same time, Olin purported to clarify the factors that the Board will take into account in determining whether an arbitrator has adequately considered the unfair labor practice: the arbitrator will be
142. Id. at 843.
143. LMRA § 203(d), 29 U.S.C. § 173(d) (1982).
144. See Collyer, 192 N.L.R.B. at 840.
145. National Radio, 198 N.L.R.B. 527, 530 (1972).
146. General Am. Transp. Corp., 228 N.L.R.B. 808, 810 (1977).
147. 268 N.L.R.B. 557 (1984).
148. 268 N.L.R.B. 573 (1984).
149. United Technologies, 268 N.L.R.B. at 559.
[Vol. 38
January 1987] ARBITRATION AND THE PUBLIC INTEREST
deemed to have done so if the contractual issue and the unfair labor prac- tice issue are factually parallel, the arbitrator has been presented with the facts relevant to resolving the unfair labor practice claim, and the arbitra- tor's decision is not inconsistent with the Act. 150
Thus, in deferring to an existing or prospective award the Board, in effect, examines that award to determine whether the arbitrator has vin- dicated public policy in the labor field. Under the criteria enunciated in Olin, however, that examination is extremely shallow, creating the strong possibility that the Board will dismiss unfair labor practice charges on the basis of an award that did not actually dispose of them. Indeed, by adopting its various deferral policies, the Board has left itself open to the charge, lodged by dissenting members15 1 and outside commentators,152 that it is abandoning to private arbitrators its statutory function of decid- ing unfair labor practice charges. Indeed, the Board has frankly ac- knowledged that its deferral policy is motivated in large part by a desire to ease its own work load.153
The argument that the Board's deferral policy represents an aban- donment of its statutory obligations has much force and is consistent with Professor Fiss' overall critique of settlement and alternative dispute resolution mechanisms. In many ways, the tensions here resemble those existing between judicial and private adjudication. In one important re- spect, however, they are heightened in the case of the NLRB's deferral policy. A fundamental feature of the NLRA is to confer upon the Board a status akin to that of a statutory ombudsman.15 4 Thus, employees, un- ions, or employers who believe that they have been injured by an unfair
150. Olin, 268 N.L.R.B. at 574. In Olin, the NLRB also returned to an earlier rule by placing the burden upon the Board's General Counsel to demonstrate that deferral was not necessary. Id. at 575.
151. See, e.g., Collyer, 192 N.L.R.B. at 851-52 (Jenkins, member, dissenting).
152. See, e.g., Christensen, Labor Arbitration and Judicial Oversight, 19 STAN. L. REv.
671, 683 (1967).
153. "Being keenly aware of the limited resources of this Agency, we are not particularly desirous of inviting any labor organization... to bypass their own procedures and to seek adjudication by this Board of the innumerable individual disputes which are likely to arise in the day-to-day relationship between employees and their immediate supervisors .. " United Technologies, 268 N.L.R.B. at 559 (quoting United Aircraft Corp., 204 N.L.R.B. 879 (1973)).
154. This status has been recognized by the federal courts:
[Tihe authors of the CSRA [Civil Service Reform Act] apparently expected the Spe- cial Counsel to act as an ombudsman responsible for investigating and prosecuting violations of the Act. The Special Counsel was modeled after the General Counsel of the National Labor Relations Board (NLRB) who performs an independent prosecutorial role with respect to employment relations in the private sector. Fur- thermore, the reports and debates concerning the CSRA are replete with characteri- zations of the Special Counsel as a "prosecutor" or "watchdog" of merit system abuses.
labor practice can, by filing a charge, entrust the handling of the case to the Board thereafter. If a complaint issues on a charge, the Board's Gen- eral Counsel will litigate the case before an administrative law judge, a United States Court of Appeals and, if necessary, before the United States Supreme Court-all without cost to the charging party. Although charging parties are permitted formally to intervene in these proceedings, they are not required to do so. Many unions, employers, or employees will, in fact, refrain from intervening altogether, or do so only to a lim- ited extent, because they cannot afford the financial costs of full-scale intervention.155
The Act's structure for processing unfair labor practice claims thus illustrates that a major objective in Congress' policy establishing the NLRB's enforcement role was to minimize the parties' costs in obtaining definitive dispositions of their claims. However, the increased cost to the parties of having these questions resolved by privately selected arbitra- tors, which is the result of the Board's expansive deferral practice, seri- ously frustrates that policy. Nor is this difficulty alleviated by the fact that the parties are merely being required to resort to the mechanism they had voluntarily selected for the resolution of disputes, for, in the overwhelming majority of cases, their arbitration agreements are limited to disputes arising under the contract, and not those arising under statu- tory law for which Congress has provided a specialized dispute resolu- tion mechanism implemented by public officials responsible to the public and applying public norms.
The NLRB's policy of deferral to arbitration is particularly ironic when viewed in light of the Supreme Court's frequent rulings that, be- cause the NLRA gives the Board primary jurisdiction to entertain cases alleging unfair labor practices, state courts and agencies, as well as fed- eral courts, are normally pre-empted from deciding cases that would af- fect the resolution of those charges.156 The rationale for this pre-emption is that Congress has devised a particular scheme of administration, sub- stantive rules, and remedies governing unfair labor practices and, except when the question implicates strong local interests or the question is
Frazier v. Merit Sys. Protection Bd., 672 F.2d 150, 162-63 (D.C. Cir. 1982); accord Wren v.
Merit Sys. Protection Bd., 681 F.2d 867 (D.C. Cir. 1982).
155. Although arbitration expenses are usually much lower than costs incurred in judicial litigation, this is not always the case. Even when they are lower, arbitration costs can still be extremely burdensome.
156. It has been held, for example, that state courts may not entertain certain tort suits seeking damages against unions for acts that are arguably unfair labor practices. Motor Coach Employees v. Lockridge, 403 U.S. 274, 293 (1971); San Diego Bldg. Trades Council v. Gar- mon, 359 U.S. 236, 246 (1959).
THE HASTINGS LAW JOURNAL [Vol. 38
ARBITRATION AND THE PUBLIC INTEREST
merely of peripheral concern to the NLRA,157 tribunals other than the NLRB are without jurisdiction to hear cases that will affect those mat- ters. Yet, under the Board's deferral policy, privately selected arbitrators are permited not only to decide the contractual disputes entrusted to them, but effectively to determine public disputes under the NLRA.15 8
To be sure, the LMRA expressly encourages arbitration of contrac- tual grievance disputes. However, the NLRA provides that the Board's power to prevent unfair labor practices "shall not be affected by any other means of adjustment or prevention that has been or may be estab- lished by agreement, law, or otherwise."159 To rely so heavily upon the LMRA's policy of encouraging arbitration thus undermines the NLRA's more fundamental policy conferring upon the Board the primary respon- sibility for enforcing the Act's unfair labor practices prohibitions. More- over, the manner in which the Board defers to arbitration represents an even more serious erosion of the Board's responsibilities under the NLRA. Under the standards set forth in Olin, the mere fact that an arbitrated dispute and the alleged unfair labor practice involved "parallel facts" raises a presumption that the arbitrator considered the unfair labor practice question, though in reality the arbitrator may not have consid- ered it at all.
Sensitivity to these concerns has always caused some members of the NLRB to dissent from the Board's policy of deferring to arbitration, whether the deferral is to an already rendered award or to a prospective award.160 Occasionally courts, too, will balk at aspects of the deferral doctrine because of what strikes them as an abandonment of the NLRB's
157. See, eg., Farmer v. United Bhd. of Carpenters, 430 U.S. 290, 296-97 (1977); Linn v.
Plant Guard Workers, 383 U.S. 53, 59-60 (1966); International Ass'n of Machinists v. Gonza- les, 356 U.S. 617, 621-22 (1958).
158. "Employees' Section 7 rights are public rights charged to the Board's protection."
United Technologies, 268 N.L.R.B. at 563 (Zimmerman, member, dissenting) (emphasis added).
159. N.L.R.A. § 10(a), 29 U.S.C. § 160(a) (1982).
160. Nowhere in the [National Labor Relations] Act itself, its legislative history, or in its judicial interpretation is there authority for the proposition that the Federal labor policy favoring arbitration requires or permits the Board to abstain from effec- tuating the equally important Federal labor policy entrusted to the Board under Sec- tion 10(a).
Olin, 268 N.L.R.B. at 579 (Zimmerman, member, dissenting); see United Technologies, 268 N.L.R.B. at 563 (Zimmerman, member, dissenting) ("Employees' Section 7 rights are public rights charged to the Board's protection."); Collyer, 192 N.L.R.B. at 853 (Jenkins, member, dissenting) ("So far as Congress has expressed any view concerning the desirability of shutting off access to the Board where arbitration is available, apart from the enactment of statutory terms which prohibit it, the view of Congress has plainly been against denying access.").
January 1987]
statutory obligations. For example, in Taylor v. NLRB, 161 the Eleventh Circuit rejected major components of the Olin doctrine. In the court's view, "By presuming, until proven otherwise, that all arbitration pro- ceedings confront and decide every possible unfair labor practice issue, Olin Corp. gives away too much of the NLRB's responsibility under the NLRA."162
According to the Eleventh Circuit, Olin either overlooked or ig- nored instances when contract and statutory issues may be factually par- allel but involve distinct elements of proof and questions of relevance. It further ignored the practical reality of many bipartite proceedings, in which individual rights may be negotiated away in the interest of the collective good. In the court's view, the Olin standard cannot satisfy the first Spielberg requirement that the proceedings below appear to have been fair and regular.1 63
The Board, however, is not bound to follow the Eleventh Circuit's disposition of its Olin doctrine in other Circuits. Until the United States Supreme Court rules on the question, the Board can continue to apply the Olin deferral standards and seek to have them enforced in other fed- eral appeals courts.164
161. 786 F.2d 1516 (11th Cir. 1986).
162. Id. at 1521.
163. Id. at 1522. Elsewhere in its opinion, the court observed that the plaintiff in Taylor
"contends that factual parallelism does not always guarantee legal parallelism and sets forth several instances in which Olin's factually parallel' test win result in inadequate or no litiga- tion of the unfair labor practice issue." Id. at 1520. Those instances were:
(1) The facts relevant to establishing a contract violation may differ from those facts relevant to unfair labor practice violations, although there may be some overlap.
Example: An arbitrator's finding of just cause for an employee's termination may overlook a real underlying reason for discharge arising from some protected activity.
(2) The standard of review for a contract violation may differ from a Board [standard] for an analogous unfair labor practice claim. Example: The amount of allowable insubordination by an employee differs for Board and arbitral purposes.
(3) The interest of the union may be to establish a favorable interpretation of a contract, not to protect an employee from a specific unfair labor practice. Example:
A group of cases may be resolved jointly on a compromise basis, despite the wishes of one grievant to proceed with an unfair labor practice complaint.
(4) A bipartite grievance committee issues a decision denying a grievance but giving no indication of whether, and if so what, evidence or issues were considered in reaching that decision. Example: The majority of Teamster grievance committee decisions do not include written explanations, as demonstrated in the decision to deny Taylor's grievance.
Id. at 1520 n.5.
164. [Ihe Board does not consider itself bound by Court of Appeals' rejection of the Board's perception of what "the law" is or should be as to a particular issue. If the Board is strongly enough minded on the issue, it persists in the application of its own point of view in subsequent cases, hoping to achieve approval by some other Courts of Appeals, thus producing a conflict in decisions among the Courts of Appeals
THE HASTINGS LAW JOURNAL [Vol. 38